Data: The Key To The Kingdom
Information is King. And Queen. Prince, Princess … well, you get the drift. Information is power. It’s royalty.
Many years ago, I was told (very matter of factly) by a respected mentor: “You can’t know where you’re going until you know where you’ve been.”
Her next words were something along the lines of, “I don’t care what you think you know. Forget it all. You’re going to study and research the past. You need to know more about the current situation, and how we got here, than the legislators you visit. It will build trust because they’ll know you’ve done your homework. Grasp the facts and understand the past — or we’ll never get what we want in the future.
I should have recorded that conversation. Though I suspect what I recalled here is actually pretty close, because it made an indelible impression on me. She wouldn’t have minced words. That was just her way. Polite, but firm.
Where Are We, Exactly?
For readers, I don’t believe you’ll be shocked when I say — for many years — the shooting sports industry in America has had a somewhat difficult time quantifying where it’s been and to some extent, even where it’s at.
Some of the reason for this lack of clarity is because no two recent years have been the same. During the Obama Administration, we collectively enjoyed some of the best sales years our industry has ever seen. The political arena would heat up, the mainstream media would pour gas on the fire and Americans would head to the gun store and clean them out.
And then they didn’t. Things died down and sales would virtually evaporate. Companies came and went like the seasons. The sales cycles and trends grew extremely erratic.
More recently, throughout the time period of the Trump Administration, most manufacturers I talk to would say the market has been “very slow.” It’s pretty easy to cashflow a business when products are literally jumping off the shelves. Not so much fun though when the opposite is true.
Fortunately, there are a few high points thrown in over these past few years to keep us off balance. For example, concealed carry pistols have enjoyed a very steady sales track. And a very few companies, in a variety of segments, will quietly tell you they’re enjoying some of their best years ever (though in most cases it’s because they’re taking market share from competitors and not because the market is actually growing). In general, 2019 has been a year reflective of declining sales statistics for many manufacturers, and a time to tighten the belt.
“The political arena would heat up, the mainstream media would pour gas on te fire and Americans would head to the gun store and clean them out. And then they didn't.”
Planning Challenges
So how is it the adjusted and unadjusted NICS numbers continue to show strength in sales? Honestly, I’d pay a lot of money to understand the dichotomy between those numbers and what I hear every day out on the street and in the boardrooms of gun makers and distributors alike. I suspect (though I can’t actually prove it) some of it has to do with “used” versus “new” gun sales, since the background checks do not specifically address this difference. And because unadjusted numbers also include the background checks for concealed carry permits, it gives the numbers even more fuzziness. I certainly can’t be the only one who questions why the NICS checks numbers remain strong while manufacturers are reporting difficult times.
This brings me to my major point: How in the world is a firearms manufacturer supposed to plan for the future when both the past and present are so cloudy? How is a manufacturer supposed to know what’s selling and what’s in need of a trash bin? How can a retailer know what to put on their store shelves?
One major answer of course is data. Lots and lots of data.
“The wholesale members of NASGW understand all too well the challenges retailers face in dealing with data and making stocking and purchasing decisions — because they face those difficult decisions, too.”
Harnessing Data
In the midst of all the confusion and the challenges of business planning starting to emerge in a roller-coaster sales environment, the National Association of Sporting Goods Wholesalers (NASGW) saw an opportunity to make a difference. Most would agree, especially if you’re a small company, data utilization can be complicated. We recognized this, and wanted to try and make more sense of the supply and demands of the shooting sports environment.
After months of planning, we launched the SCOPE business analytics platform to members last October. There are over 20 distributors supplying sales and inventory information, creating a picture of what the two-step distribution sales channel looks like. And while it’s not a perfect representation of the entire shooting sports market — partly because it doesn’t show the final retail picture — it’s a massive step forward for our industry which is a bit behind many others in terms of data utilization. Because the volume of data is substantial, it can be used for all sorts of business decision-making, from production to marketing to sales. Some companies are even using it in their compensation models for sales teams or manufacturing representative partners.
As of now, we’re tracking billions of dollars in shooting sports transactions each year in distribution. What manufacturer subscribers can learn from it is both exceptional and powerful all at the same time. At the NASGW Expo in October, we released a “case study” completed in partnership with SIG SAUER, explaining in detail how they’re using the data to move the company forward. This case study is being used to help other companies understand how they, too, can benefit from using data to make decisions.
On the next page, you’ll see we’ve included some of the graphic representations SCOPE subscribers receive at a very “high level.” These are statistics from the end of September (the latest available when this article was submitted). Member subscribers and distributors can track this information on a weekly basis and at a much deeper level down to the SKU level in most cases.
As you can see in the illustrations, the only market seeing much growth in 2019, at least in distribution, is the ammunition market. Firearms distribution shipments year-to-date are down more than 8% when compared to 2018, and optics are down just under 2% from last year. A recent surge in ammunition sales sees the category up over 6% from 2018 (through September).
Again, this is high-level information. But it, too, can be exceptionally useful for business forecasting and trending. The data we have dates back over four years, facilitating a historical view. Of course, with time, it will grow even more relevant and valuable. Subscribers can watch what’s hot and what’s not among their product lines. They’re able to calculate sell-through rates for products and better understand what’s in inventory to either capture sales or adjust production. This data even enables manufacturers to understand where in the country their products are selling, so they can make adjustments in their marketing initiatives or see if a marketing campaign is having an impact.
The wholesale members of NASGW understand all too well the challenges retailers face in dealing with data and making stocking and purchasing decisions — because they face those difficult decisions, too. The connections between retail and distribution are so strong, and have been forged into trust relationships for decades, distributors feel this is a great platform to help their partners understand the changing nature of the shooting sports sales channel.
A Window To The Future
The data we have now is just the beginning. The distribution channel available is just the “first-step” for the NASGW SCOPE program. Even more data streams are in development; the SCOPE program will expand to show data from the retail point-of-sale perspective. And it’s all being done for the benefit of the industry, it’s not a profit center.
Distributors are working to collaborate at an even deeper level with retailers on data utilization, while providing a snapshot of the entire shooting sports distribution channel from top to bottom. In the end, this means better information for manufacturers, distributors and retailers, enhancing the partnerships that already exist and, hopefully, fostering a whole new way to look at how business is conducted.
Data, and using it to make decisions can be complex, daunting and overwhelming. NASGW and its distributor leaders are working hard to cut through the clutter and offer a window to the future, which will benefit the entire shooting sports industry.
